SQM, ROC and FMC are diversified chemical manufacturing...

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oslo

5,687 Posts.

23/01/16

22:35

Post #: 16857558
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Originally posted by Upmarket ↑

Am considering investing and been looking around various sites. I noticed this post last year on market capital:

Amateur calculations based on Oligopoly partners P/E ratios

SQM P/E 22.46
ROC P/E 46.60
FMC P/E 17.64
Average P/E 28.84

ORE Projected Earnings circa 70m
If we take the high then 70 x 46.6 = 3.248B market cap pot.
If we take the low then 70 x 17.64 = 1.234B market cap pot.
If we take the average then 70 x 28.84 = 2.018B market cap pot.

This back of envelope analysis would suggest a conservative market cap, once the market is comfortable that ORE have addressed all production challenges of $2B, given the expectations for the lithium price to continue to rise.

My query is how was 49% of Talison valued at $US475M in 2014 - it is a much bigger resource and been operating for years. Why wasn't it worth billions? I'm hoping there is a simple answer like ORE will be much more profitable or different quality.

Any insight appreciated.

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SQM, ROC and FMC are diversified chemical manufacturing companies hence have high P/E ORE has higher risk being a single commodity company.

ORE Price at posting: $2.45 Sentiment: Hold Disclosure: Held
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0 Great analysis

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SQM, ROC and FMC are diversified chemical manufacturing...

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